Linking complaint management to profit

This paper contends that complaint management should result in customer satisfaction but more importantly it should lead to operational improvement and improved financial performance. It is argued that many organisations ignore the operational value of complaints and as a result many complaint processes seem geared to trying to mollify customers rather than ensuring that problems do not reoccur. Using data from an empirical benchmarking study, based on a detailed questionnaire completed by customer service managers in 40 UK organisations, the relationships between seven key variables, complaint processes, satisfaction, retention, process improvement, employee attitude and retention, and financial performance are calculated and a relationship model developed. The results expose significant correlations between all variables in the model, as a result four acid tests of complaint management are proposed. It is suggested that financial improvements may be better leveraged by bringing about organisational improvements and by ensuring complaint processes are “staff‐friendly”, rather than simply trying to satisfy customers.